A purely competitive wheat farmer can sell any wheat he grows for $10 per bushel. His five acres of land show diminishing returns because some are better suited for wheat production than others. The first acre can produce 1,000 bushels of wheat, the second acre 900, the third 800, and so on. Instructions: Enter your answers as a whole number. a. Use the table below to help answer the following questions. How many bushels will each of the farmer's five acres produce? How much revenue will each acre generate? What are the TR and MR for each acre? That Acre's That Acre's Acre TR MR Yield (bushels) Revenue $0 1 4 b. If the marginal cost of planting and harvesting an acre is $8,000 per acre for each of the five acres, how many acres should the farmer plant and harvest? acres

A purely competitive wheat farmer can sell any wheat he grows for $10 per bushel. His five acres of land show diminishing returns because some are better suited for wheat production than others. The first acre can produce 1,000 bushels of wheat, the second acre 900, the third 800, and so on. Instructions: Enter your answers as a whole number. a. Use the table below to help answer the following questions. How many bushels will each of the farmer's five acres produce? How much revenue will each acre generate? What are the TR and MR for each acre? That Acre's That Acre's Acre TR MR Yield (bushels) Revenue $0 1 4 b. If the marginal cost of planting and harvesting an acre is $8,000 per acre for each of the five acres, how many acres should the farmer plant and harvest? acres

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose that you have a management job at a firm like Estrella River Ranch, a beautiful vineyard and one of more than 200 vineyards growing cabernet sauvignon grapes in California. Assume that the market is perfectly competitive. Also, assume that you cannot instantly change production when demand changes, and grapes cannot be stored, so your firm must sell all of the grapes it grows. The adjacent figure (Figure A) shows the situation at your California vineyard. If demand is high, the price is $3,000 per ton of grapes, and if the price is low, the price is $1,000 per ton of grapes. Producing 300 tons of grapes maximizes your firm's expected profit. Suppose that there is no fixed cost. If demand is high and your firm produces 300 tons of grapes, its economic profit on the tons of grapes between 100 and 300 tons is $ If demand is low and your firm produces 300 tons of grapes, its economic loss on the tons of grapes between 100 and 300 tons is dollars. (Enter a negtive sign to indicate a…
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A purely competitive wheat farmer can sell any wheat he grows for $10 per bushel. His five acres of land show diminishing returns because some are better suited for wheat production than others. The first acre can produce 1,000 bushels of wheat, the second acre 900, the third 800, and so on. Instructions: Enter your answers as a whole number. a. Use the table below to help you answer the following questions.. How many bushels will each of the farmer’s five acres produce? How much revenue will each acre generate? What are the TR and MR for each acre? Create a table with the amount of acres (1-5), that acre's yield (bushels), that acre's revenue, TR, and MR. b. If the marginal cost of planting and harvesting an acre is $7,000 per acre for each of the five acres, how many acres should the farmer plant and harvest? acres
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